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Chipotle Mexican Grill, Inc. Message Board

  • realtrade01 realtrade01 Apr 14, 2012 6:36 PM Flag

    SERIOUS TALK ABOUT CMG

    tried posting twice..reply is the original post

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    • Valuation reality check:

      CMG looks more overpriced compared to Priceline and Apple. Look at the spreads.

      CMG
      P/E- 65.15
      EPS- 6.76

      PCLN
      P/E- 35.64
      EPS- 20.63

      Apple
      P/E- 17
      EPS- 35.14

    • I'll try to be serious. Seriously.

      Without doing homework, idle chit chat on these boards is worthless.

      Study the % of float short. Study GMCR's rise. And fall.

      Its all in what I would call.... naked long positions. Can such an animal exist? Good question, but naked short sure as hell can. And its criminal. But its the game. Demand data on naked short positions. And have a longer time frame in your plotting. Quarterly ER's for these high vis rockets are like drunken Friday nights at Belagio's craps tables and they're for sucker to join in and lose it all. All due respect.

      That being said; you can study all you want, but unless you can beat (insight) the algorithms that are used by the largest holders at certain times, those times being coordinated through secret handshakes between firms, you ain't got a chance. But you guys all just have to learn that on your own I reckon.

      Good luck. Seriously. ;)

      • 1 Reply to lockheedgibson
      • Tech analysis of this is useless. Of course its going to head and shoulder. The left shoulder is where most of uze probably jumped in. Think about it. The right shoulder is to trap longs. Everybody (save the sharks) loses. The algorithm will play itself out again and again depending on the "new" cash in the game. Head and shoulders is just one manifestation that can take place. In this case, the above posters are spot on and its happening right before our eyes.

        If I had an extra 5K to burn, I'd be in there too. I gotta admit. The valuation can't hold for 3 years, not without,.... pffff, even a China deal won't justify it. Its all a game folks, and old skinny Jimmy of chair throwing fame is eating it up. Feed the pig.

        (echooo) ....Feed the pig.

    • sybil ur an idiot plain and simple

      tech i admire your optimism while you are down big, but it doesnt make sense..the market can stay irrational longer than you can stay solvent...old market addage...i mean doubling down and riding this thing to 500 seems silly...the small left shoulder you are talking about doesnt seem material...i mean it doesnt show up on the weekly at all only on the daily...the ones that make large head and shoulders tend to reverse the entire move....all the way back down to 40 is what im saying....this one doesnt seem like it....i understand all the arguemnets as to why u are short...same ones i got short...but it doesnt feel right...

      kallasinpr i saw u mentioned some option strategies...can you be a bit more specific, like what straddles/strangles one would get into to hedge and already losing position?...and thank you for a serious reply

      • 2 Replies to realtrade01
      • Left shoulder was the summer fall move to 350ish and down to 280, left side of the head is happening now. Right sided will happen shortly. Will bounce to form right shoulder around July earnings report. From there, heads south for good...

        Summer will bring $4-$5 gas (absent an Iran shock), high commodity prices and weak consumer demand. With the low hanging fruit gone, growth slows precipitously and no one wants to be holding a stock at 65X when growth slows to 10%...

    • First and foremost .i am short CMG at 430. i was short at 393. let my loser run against me even against better judgment and covered at 417 when it hit about 411 and bounced. then re shorted day before yesterday. 2ND stupid move. only to watch it go to 442. man i can sure pick em. im probably gonna cover on Monday hopefully on some weakness. i know i know. im capitulating.

      i dont want to. and i can almost guarantee at some point in the distant future CMG will see 150(point of breakout in 2010. but do i stick with this losing trade or swallow my pride knowing i f'ed up big time. im down about 5k. real talk here. none of this sybil garbage about how she has a gazillion shares short and can hold on till infinity

      im looking at this thing thinking its gone parabolic. but over the last 24 hrs. i have started thinking that maybe this is just the start of a parabolic rise. do i think this POS should be valued at almost 14B? an emphatic no. but how can i argue when im the one losing money? do i think that it should have added nearly 775 million in market cap from it low on tuesday? u know the answer.

      im seriously conflicted here. do i keep on with this or do i realize my thesis is right. just not right, right now?

      i started looking at other high fliers GMCR, OPEN, JOE, NFLX(so many like it to compare it to) and those aren't the only ones. they all have one thing in common. when they topped it topped with a head and shoulders pattern. look at them all. you will see a clear head and shoulders. ANR, POT,RIMM and countless others with a similar pattern that i don't here in CMG yet.

      look at it as though it was a stock that split 10 for 1. is a move from 39 to 44 parabolic? GMCR went from 35 to 115. OPEN went from 35 to 115. JOE went from 30 to 80. RIMM 30 to 145.

      yes 17 weeks of straight up is beyond ridiculous. yes also to a 65/pe restaurant. and a PEG of 2 and all other reasons, like them being able to serve 300 customers in an hour or making $10 every 1.5mins for an entire day across all the chipotles. every hour they are open , every single day. all freaking ridiculous. but the stock goes up

      i might be wrong in covering the short. and have this garbage crater to 300 in the coming weeks. but it is what it is. right now. the loss is getting out of hand. and should have been reigned in earlier

      im opening this to a serious discussion. please no nonsense

      • 5 Replies to realtrade01
      • i had a short in the mid 300s,covered the same week at a small loss, so i feel your pain....my take away for me is not to short on valuation (seemed way overvalued 100 bux ago but mr mkrt obviously disagrees)but only when a huge negative shows up w/ the co..you had mentioned shorts on nflx and gmcr,those shorts paid off only after a catalyst was presented (the nflx duo concept fiasco and the gm acct issues),perhaps the er will provide a catalyst ?it would be great to be out ahead of this when she falls ,however,until she sends a clear signal i will be on the sidelines glty

      • Nothing wrong with covering if ur at your pain threshold. You very well are probably right on direction, just early. That is a hard trade to hold, especially when stock making 52 week highs. Upon covering, promise yourself that you'll take a proverbial lap, walk it off, regain your head & RE-ENTER only when the time is right. All fundies aside, (yeah I get they serve food that costs pennies to make & sell it at high prices) Nothing is rolling over yet in the technicals even on a weekly chart that says SHORT quite yet. But, your rationale on the trade is correct. The downside is coming. Be patient & keep your powder dry. Opportunity will present itself to profit & clean up your losses. Because even if the company's fundies are strong this bull will run her course & that alone will drag CMG down. Patience is the key here.

      • I'm new to this board, so please bear with me. I've been making a killing being short(viz. puts) on FSLR and GRPN. These two stocks are down both fundamentally and technically. Fundamentally, FSLR has warranty issues, has solar panels that don't work in high heat, mysteriously lost $400mm last quarter, has antiquated technology, is fighting government subsidy cuts and the Chinese subsidizing their solar industry. Last year FSLR was the most highly shorted stock in the S&P. Technically, FSLR has been trending down for the last 2 months. It trades at 40% of book value. Longs have been trying to call a bottom since July when the stock was at 117(all time high north of $300). The amount of denial is staggering. Yet they keep fighting the tape.
        CMG as I understand it is both technically and fundamentally sound. On a valuation basis it is way overpriced. Unlike OPEN it does not have competition that can do the same thing it does for free(eveeve and freebookings) and is not showing negative growth;unlike GMCR it is not having its lunch eaten by a competitor providing a similar product(the K-cup);unlike RIMM it doesn't have antiquated technology. Until either the charts or fundamentals(or both) break down, I cannot see a reason to short this overpriced stock. It is very rare indeed(just ask the FSLR longs) when you can catch the exact top or bottom of a stock. There is plenty of time to do it when momentum changes.

      • Sorry to hear about your situation. CMG has shown no mercy to shorts despite the fact that CMG's rich valuation and fundamentals should draw in some short interest. I don't short shares like you do but I use options such as puts/calls. I bought a put here last Friday. I am hoping that CMG has a down day on Monday for once or at least rests and does not climb to new 52 week heights like it did last week day after day.

        I'm hoping that CMG lands somewhere between 430-440 before earnings. Of course, I would like to see it drop even lower this week but that may not happen.

        If CMG fails to beat by a significant level at earnings or guides lower, it should fall hard (E.G. low 400's or maybe even more). That would be relief for you. It's hard to tell right now how the stock will trade post earnings. But I do know that during last earnings CMG failed to meet EPS and dropped some. Revenues were decent.

        CMG is priced to perfection at this level. There is lots of pressure on CMG to outperform at earnings for once. After all, this is a momo stock that has seen incredible buying action.

        If I were you, I would keep holding on and not cover yet. Let's hope CMG drops this week, stays below 442 before earnings, and then misses at some level which will likely result in some selling action and new dip buyers. You could also consider a straddle and play both sides if you want to.

        Good luck.

      • Everyone needs to know his or her pain threshold. I don't care if it goes further, because I plan for it.

        Could it? Sure. Will it? Probably. But, why not establish a core short that you could ride to 500 and then double up? I will be doubling up at 450.

        Human intervention is starting to impede the machines... Those fund managers still holding when it breaks to 150 will have a whole helluva lot of explaining to do and will likely face massive redemptions because investors will realize they were willing to gamble with OPM...

 
CMG
418.75+5.41(+1.31%)Aug 26 4:02 PMEDT